By Dennise Williams, Staff ReporterDENNIS JOSLIN Jamaica, Inc. (DJJI) is looking to dispose of over US$26 million worth of real estate held in Jamaica. Newspaper advertisements and a glossy magazine type supplement give pictures and descriptions of the properties for sale, but it is the web site of DJJI that reveals the cost of the properties quoted in United States currency. Listed commercial and residential properties range from US$16,000.00 for a residential lot in Golden Acres in St. Catherine to US$8,500,000.00 for the former Island Life Centre on St. Lucia Avenue.
Additionally, DJJI offers financing to qualified purchasers with a 30 per cent deposit. The monthly payments are financed over 5 years with interest charges of 12 per cent. According to General Manager of DJJI, Janet Farrow, "To qualify, purchasers need to present a financial statement, proof of employment and provide bank accounts. It is the same as any other mortgage transaction."
In terms of public response to the properties listed, Ms. Farrow tells the Financial Gleaner that, "Response has been great. It has been tremendous. Our residential properties sell very quickly, but the commercial properties are a bit more complicated to sell and sometimes take up to 12 months." However, realtors approved to sell DJJI properties tell a different tale. None of the realtors were willing to divulge their names, but the consensus was that sales are slow, with one realtor stating that he had not made a sale of a Joslin property in three months.
PURCHASERS TURNED OFF
According to those interviewed, prospective purchasers are turned off by the US dollar requirement, the unwillingness of DJJI to negotiate prices, and the perception that the properties are overvalued. But the biggest contention is the reduced commission that realtors will earn.
At Arizona Jamaica Limited, our contact stated, "Joslin has reduced our commission from the normal 5 per cent to 3 per cent of the property's value. When the properties were with FINSAC, their policy was that you earn the regular commission up to J$30,000,000 and 3 per cent for properties worth more than that. The fact is that brokers won't push 3 per cent properties. The effort to show five or six persons a property and then only earn 3 per cent is not worth the effort. The other thing is that FINSAC has sold the better properties. What is left is really considered unattractive.
"Also, in my opinion, Joslin has increased the price from what FINSAC was selling." On the point of increased prices, Channel Realty agreed. "Take the Island Life Centre. Last year it was selling for US$6 million. Now Joslin is selling for US$8.5 million. Has the real estate market in Jamaica really increased by 30 per cent to justify this amount? No, now I could see a 10 per cent increase, but not what they are asking for."
However, according to Ms. Farrow, there are two offers pending on the Island Life Centre, but she would not give the Financial Gleaner any further details. On the point of the US dollar asking price, both realtors found that their clients turned off by this. Said Arizona, "Financing in US dollars has a significant impact on our Jamaican dollar because it is only going in one direction, down."
When you buy property in US and earn Jamaican dollars, you will be bankrupt very soon. Channel Realty added to this by saying, "The seller financing that Joslin offers is only attractive to Jamaicans overseas earning US dollars."
TWO SIDES TO THE MATTER
However, it is acknowledged by Arizona that, "Joslin bought the properties in US dollars and so there are two sides to the matter, it is very complicated." Ms. Farrow informed the Financial Gleaner that US dollar monthly payments were only required when financing is accessed from her company. "It is just our policy to list in US dollars, but if the purchaser gets a mortgage from a local institution, then of course they would pay in Jamaican dollars."
The properties for sale make up a part of the package of bad debts that DJJI acquired from the Government of Jamaica in February of 2002. Dennis Joslin Company, LLC, the parent company of DJJI, specialises in purchasing non-performing loans for restructuring or resolution. Dennis Joslin Company, LLC currently operates in eleven US states. The company sells the loans, real estate and other assets acquired. The terms of the deal with the Government of Jamaica were:
An initial payment of US$23m on closing for the right to collect US$393m worth of debt for FINSAC.
FINSAC is entitled to receive a percentage of all gross collections after closing as follows:
15 per cent of the first US$50m collected;
25 per cent of the next US$50m collected;
35 per cent of the next US$50m collected;
45 per cent of the next US$50m collected;
50 per cent of all further collections thereafter.
